Brexit’s $74 Trillion Battle Over Derivatives Is Heating Up Alexander Weber and Silla Brush – BloombergIndustry groups want extended access to London clearinghouses; FIA and AFME say solution is needed before end of this yearLondon’s dominance of the derivatives market is under threat, with European firms at risk of being blocked from using clearinghouses in the British capital within six months.
The Great Index Apocalypse Comes for Bond Managers; Like stockpickers before them, fixed-income stars will face tougher competition from more sophisticated indexes.Nir Kaissar – BloombergInvestors are fleeing actively managed stock funds in favor of index funds.Active bond funds may be next.Academics have understood for decades that stockpickers are unlikely to beat their benchmark indexes after fees, but investors’ reaction was delayed.They kept handing equity managers money.
From 1993 to 2007, actively managed stock mutual funds boasted net inflows every year except one, according to Morningstar Inc.’s earliest available numbers.
Reforms Have Made Banks Safer but Markets More Brittle; Spike in repo rates reflects constraints on bank trading from post crisis rules Greg Ip – WSJIn the decade since the global financial crisis the U.S.financial system in many ways is much safer, with banks far less likely to fail or need a taxpayer bailout.
Why I’m Worried About the Repo Market; It’s hard to predict how the financial system will handle shocks.Narayana Kocherlakota – BloombergThe recent unrest in money markets, which briefly caused short-term interest rates to get out of the Federal Reserve’s control, won’t undermine the central bank’s ability to achieve its longer-term economic goals.
That said, it does signal that something’s very wrong with the financial system.
The Real Story Of The Repo Market Meltdown, And What It Means For Bitcoin Caitlin Long – ForbesLast week the financial system ran out of cash.It was a modern version of a bank run, and it’s not over yet.Stepping back, it reveals two big things about financial markets: first, US Treasuries are not truly “risk-free” assets, as most consider them to be, and second, big banks are significantly undercapitalized.The event doesn’t mean another financial meltdown is necessarily imminent—just that the risk of one is heightened—since the brush fire can be doused either by the Fed, or by the banks raising more equity capital.However, it provides a “teachable moment” regarding systemic fragility and anti-fragility.
Four Collision Courses for the Global Economy Nouriel Roubini – Project SyndicateBetween US President Donald Trump’s zero-sum disputes with China and Iran, UK Prime Minister Boris Johnson’s brinkmanship with Parliament and the European Union, and Argentina’s likely return to Peronist populism, the fate of the global economy is balancing on a knife edge.Any of these scenarios could lead to a crisis with rapid spillover effects.
New York Fed Boosts Size of Repurchase Operations Overnight loans rise to $100 billion from $75 billionDaniel Kruger – The Wall Street JournalThe Federal Reserve Bank of New York said Wednesday it would increase the size of scheduled operations to provide short-term cash loans to financial firms.The Fed said it would increase the size of overnight cash loans offered Thursday through the market for repurchase agreements, or repos, to $100 billion from $75 billion, while doubling the size of a two-week offering Thursday to $60 billion.
The feud at Credit Suisse that has shaken Swiss banking; Car chases and rows over cocktails: the fallout threatens CEO Tidjane Thiam Stephen Morris – FTThe staid world of Swiss banking has been rocked by lurid details of the breakdown in the relationship between Credit Suisse chief executive Tidjane Thiam and Iqbal Khan, who ran the bank’s wealth management division.
Credit Suisse Tabloid Scandal Explodes Into Threat to CEO Thiam Patrick Winters – BloombergBoard of directors is set to conclude spying probe this week; Bank is scrambling to contain crisis after Iqbal Khan incidentWhat started as an embarrassing tabloid scandal at Credit Suisse Group AG has suddenly emerged as a very real threat to the bank’s top executives, including Chief Executive Officer Tidjane Thiam.
ABN Amro Dirty Money Probe Piles Pain on Europe’s Troubled Banks Ruben Munsterman and Wout Vergauwen – BloombergABN investigated for failing to report suspicious transactions; Laundering scandal drags on as banks struggle to raise profitA new money-laundering scandal, this time at Dutch lender ABN Amro Bank NV, adds yet another burden to European banks already struggling to improve profitability amid negative interest rates and lackluster economies.
A Cushing, Oklahoma effect for bitcoin futures? Jemima Kelly and Izabella KaminskaCrypto is crashing again.Bitcoin’s down 12 per cent in the past 24 hours, and is trading at its lowest levels in 3-1/2 months, around the $8,400 mark.
(Chart courtesy of coinmarketcap.com.)
Traders React to a Study That Says It’s Virtually Impossible to Day Trade for a Living By Kiril Nikolaev – CCNAcademic researchers in Sao Paulo, Brazil have studied the likelihood of success in day-trading for a living.The results weren’t positive.
The World Federation of Exchanges & SSE launch blueprint to support exchanges in embedding sustainability World Federation of ExchangesThe World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has partnered with the United Nations Sustainable Stock Exchanges (“SSE”) initiative to define ‘How exchanges can embed sustainability within their operations: a blueprint to advance action’.
SIX taps Refinitiv managing director to head up Financial Information business; Marion Leslie to join SIX as head of the Financial Information business unit as of 1 January 2020, replacing Robert Jeanbart.John Brazier – The TradeSwiss exchange group SIX has announced the appointment of Marion Leslie to head up its Financial Information business.bit.ly/2npPIyt Fintech
Gold app Glint collapses just months after fundraising; Backers included Conservative MP Steve Baker and Berenberg’s investment banking head Henry Sanderson – FTA UK start-up that promised to allow people to pay for goods in gold has collapsed, dealing a blow to its backers including Conservative MP Steve Baker, who had promoted the company on Twitter.
Fintech lenders taking more market share from banks, survey finds Will Hernandez – American BankerFintechs are continuing to siphon away customers for unsecured personal loans from traditional lenders, according to a study released Wednesday by Experian.
The study found that digital lenders more than doubled their market share in the past four years, with consumers across the credit spectrum increasingly turning to fintechs like Lending Club and Social Finance.
Singapore and the UK are struggling to attract fintech talent for their companies Lea Nonninger – Business InsiderWhile fintechs are successful in securing the required funding to grow their businesses — they received over $8.3 billion in Q2, up from just over $5 billion the previous quarter, per CB Insights — accessing the right talent to help them do so can be more challenging.The struggles have recently become apparent in Singapore and the UK, according to new report findings.
Southeast Asia’s No.1 Travel App Is Getting Into Fintech Yoolim Lee – BloombergTraveloka, Southeast Asia’s largest online travel startup, is getting into financial services.The startup backed by Expedia Group Inc.and JD.com Inc.
will issue a credit card with Indonesia’s PT Bank Rakyat Indonesia Persero Tbk linked to its booking services.The travel app is targeting many users across the Indonesian archipelago who have little or no access to traditional banking or reliable internet.
Refinitiv equips wealth managers with quantitative behavioral economics tool to monitor global market psychology RefinitivRefinitiv today reinforced its commitment to the wealth management industry with the launch of a proprietary data set MarketPsych Indices (RMI) via a new cloud-based feed for brokerages, investment advisers, wealth managers and their clients.The new tool is the first of its kind for wealth managers, and it provides an unparalleled capability to visualize media perceptions – buzz, themes, emotions – and make assessments in correlation to asset prices.
SpiderRock Advisors Teams With State Street Global Advisors SPDRs To Serve Individual Retirement Accounts And Financial Advisors’ Non-Taxable Business PR NewswireSpiderRock Advisors, LLC, a rapidly growing asset management firm focused on providing customized option overlay strategies to advisors and institutions, today announced a new model offering “SpiderRock Advisors Qualified Solutions Portfolios.Built with SPDR® ETFs.” This unique solution enables qualified accounts with access to State Street Global Advisors SPDR® ETFs model portfolios, to utilize SpiderRock Advisors option overlay strategies.
Wells Fargo Co-Signs Cryptocurrencies With New Digital Cash Product Kori Hale – ForbesWells Fargo is the latest bank to jump into the cryptocurrency space with the launch of its stablecoin product, dubbed Wells Fargo Digital Cash.The tokenized dollar will allow users to move money internally across the firm’s global network in “near real-time.” Banks have taken a general “no new friends” stance on decentralized cryptocurrencies and warned against the alleged dangers of operating outside the control of a fiat-based financial system.
Are banks starting to understand that they can use the technology for instant payments, while eliminating the need for middlemen?
Blockchain storage network Filecoin launching testnet in December and mainnet next year The Block CryptoFilecoin, a blockchain data storage network that will allow users to buy and sell unused storage on an open market, has finally announced updated testnet and mainnet launch schedule.
Banks on Sidelines May Limit Early Bakkt Bitcoin Futures Volume Matthew Leising – BloombergThe number of banks willing to act as a gateway to allow customers to buy and sell Bitcoin futures on Intercontinental Exchange Inc.may be a key to the success or failure of the new contract.
ECB’s Coeure Warns Stablecoins Could Affect Monetary Policy Piotr Skolimowski and Birgit Jennen – BloombergStablecoin credits, overdrafts may impact policy transmission; Coeure heads G-7 working group on stablecoins, spoke in BerlinPrivate stablecoins such as Libra could affect the transmission of monetary policy through the economy, European Central Bank policy maker Benoit Coeure warned as he stepped up his call for rules to govern digital currencies.
The New Medici Bank Is About to Take On Its First Crypto Clients Nathan DiCamillo – CoindeskA new crypto-friendly bank with a historic pedigree is about to take on its first clients.Revealed exclusively to CoinDesk, Medici Bank is launching into private beta in October.The Puerto Rico-based bank will be testing the digital onboarding process, web portals and its application programming interface with five companies from around the globe.
Kik CEO vows to fight SEC over Kin crypto until ‘we don’t have a dollar left’ The Block CryptoKik founder and CEO, Ted Livingston, has said that he is ready to keep fighting with the U.S.Securities and Exchange Commission (SEC) over Kin, the firm’s native cryptocurrency.
Facebook’s Zuckerberg Appears to Put Libra Launch Date in Doubt Daniel Palmer – CoindeskFacebook CEO Mark Zuckerberg has refused to commit to the planned 2020 launch for the Libra cryptocurrency project.
WATCH: How Blockchain Oracles Could Take Chainlink to New Highs Christine Kim – CoindeskChainlink CEO Sergey Nazarov says there’s one big thing holding back corporate adoption of blockchain technology: reliable oracle services that connect blockchain systems to real-world events, and vice versa.
Libra Crypto Is ‘Undoubtedly’ a Wakeup Call for Central Banks, Says ECB Exec Richard Meyer – CoindeskFacebook’s Libra could potentially solve some of the problems in the international payments market, but it might create a number of others that will require creative thinking by the regulators, says an European central banker.
Ex-Fed Official Takes Aim at Bank of England’s Crypto Proposal Katherine Greifeld – BloombergBank of England Governor Mark Carney’s plan to end the dollar’s dominance in the global financial system ignores the benefits of having the greenback as a reserve currency, according to former senior Federal Reserve official Simon Potter.
The dollar should eventually be replaced by something like Facebook Inc.’s proposed Libra cryptocurrency, Carney said last month.
Tron’s Justin Sun to Reschedule Warren Buffett Lunch ‘Very Soon’ Marie Huillet – CointelegraphTron founder and CEO, Justin Sun, says he’ll reschedule his charity lunch with Berkshire Hathaway chairman and billionaire Warren Buffett “very soon.” The CEO announced the news during a live stream on Tuesday, Sept.
24.As reported, Sun had won a charity auction on eBay in June to have lunch with Buffett and his own choice of guests, with a winning bid of $4,567,888 — the highest bid in the event’s 20-year history.
Coinbase Now Supports Stellar and Chainlink Cryptocurrencies in New York Daniel Palmer – CoindeskCryptocurrency exchange Coinbase has announced that New York residents now have access to two cryptocurrencies launched for other jurisdictions months ago.In two tweets late on Wednesday, the exchange said customers based in New York state can now hold, buy, sell, send and receive both Stellar lumens (XLM) and Chainlink’s LINK token.The cryptos will now be available on Coinbase.com and the exchange’s iOS and Android apps in the state.
Amazon to launch Ownera Digital Securities API Freeman Lightner – AppliedDeveloperMagazineOwnera, the institutional-grade blockchain network for digital securities (AKA Security Tokens), has announced it will be releasing its Digital Securities API utilizing the Amazon Managed Blockchain service running HyperLedger Fabric.Ownera is a network where all nodes will be regulated financial entities (such as banks, asset managers and exchanges), who underwrite and distribute the assets on the network.bit.ly/2lp3lgY Politics
Impeachment May Be Just What the Stock Market Needs; A rally seems likely if the trade war gets put on hold while Trump defends himself.
Conor Sen – BloombergWith the just-launched impeachment inquiry likely to consume President Donald Trump’s attention for as long as it lasts, one issue is less likely to hold his attention – his trade war with China.For markets, putting the trade war on the back burner may be a more significant catalyst than impeachment hearings, allowing stocks to head higher.
Trump impeachment? History suggests Wall Street ought not worry Noel Randewich – ReutersThe move by Democrats in the U.S.Congress on Tuesday to launch a formal impeachment inquiry into President Donald Trump has caused nervousness on Wall Street – but history suggests investors need not worry.
American Farmers Are Main Winners from U.S.-Japan Trade Agreement Mario Parker – BloombergU.S.farmers — reeling from trade wars, low commodity prices and bad weather — are set to be the main winners from President Donald Trump’s initial accord with Japan.
The End Of The Line For Incompetent Men; Trump facing impeachment, Boris Johnson on the ropes, WeWork’s CEO ousted ? is time finally up for bumbling leaders? Emily Peck – Huffington PostCould it be that competence matters? Maybe! This week the walls started crumbling around some of the top leaders in the business and political worlds.U.K.Prime Minister Boris Johnson, famous for being rumpled and lying, got smacked down by a unanimous court decision.
WeWork founder Adam Neumann, known for outrageous behavior and wild proclamations about ruling the world, was ousted.
And, of course, U.S.President Donald Trump moved ever closer to the possibility of impeachment.
House Passes Bill to Protect Banking for Marijuana Businesses; Measure would prevent federal regulators from penalizing institutions that serve companies operating in states where cannabis is legal Jesse Naranjo – WSJThe House of Representatives passed legislation Wednesday to protect financial institutions that serve marijuana businesses in states where the substance is legal.
Fears of a Warren presidency on rise among stock-market investors, survey shows Chris Matthews – MarketWatchAs Elizabeth Warren’s poll numbers rise, so does anxiety on Wall Street.That’s a according to a survey of U.S.institutional equity investors published Tuesday by RBC Capital Markets, which showed a declining share money managers expect President Donald Trump to win reelection next year.A rising expect the Democratic nomination to go to Sen.Elizabeth Warren of Massachusetts.
Anthony Scaramucci says Trump will get fired but markets won’t care David Goldman, CNN BusinessAnthony Scaramucci believes President Trump will get removed from office for his “prima facie lawlessness.”“The jig is up,” the former White House communications director told CNN Business on the “Markets Now” live show Wednesday.“The guy committed a criminal act as president of the United States.
Just look at the transcript.”
Trading Impeachment Threat Is Mission Impossible for Wall Street Michael P.Regan and Laura Litvan – BloombergLatest drama raises questions over China trade talks; ‘You can’t trade this stuff right now,’ Michael Purves says.With a statement lasting only a few minutes, House Speaker Nancy Pelosi unleashed an impeachment inquiry that has the potential to move the price of everything from soybeans to stocks, bonds and the U.S.dollar.
Traders Find an Unlikely Haven Amid Impeachment Crisis; Investors are taking refuge in the dollar and American stocks.
That isn’t because they’re positive about the country – they just lack conviction.John Authers – BloombergConstitutional crisis hits the U.K.The U.S.girds for an impeachment drama.
The euro zone lurches toward recession.And the U.S.stock market nearly hits a new high.What gives?
Attorney General Barr Seeks DOJ Facebook Antitrust Probe David McLaughlin – BloombergFacebook now target of two federal cases simultaneously; FTC already has separate Facebook investigation underwayThe Justice Department intends to investigate Facebook Inc.
after prodding from U.S.Attorney General William Barr, according to a person familiar with the matter, even though the Federal Trade Commission already has an inquiry underway.
Elizabeth Warren will be the winner from Trump impeachment; Eruption of ‘Ukrainegate’ is only likely to deepen Joe Biden’s difficulties Edward Luce – FTIt was coincidence that Elizabeth Warren took the lead in the Democratic presidential race on the first day of the Donald Trump impeachment process.It was nevertheless a poetic one.Ms Warren is running against a “rigged system” that serves the wealthy elites.
She warns that the global marriage of “authoritarianism and corrupt capitalism” is pushing America down the slippery slope to kleptocracy.The fact Mr Trump could be impeached for exactly what Ms Warren is running against is something of a windfall.It is pure bonus that Ms Warren’s chief rival, Joe Biden, is also caught in the cross fire.
Trump Understands What Markets Truly Care About; A softer trade stance leads financial commentary.
Plus repo madness and a dollar enigma.
Robert Burgess – BloombergSome 24 hours after he sent equities tumbling by using a United Nations address to bash China — accusing it of manipulating its currency and stealing intellectual property just days before planned high-level trade talks — President Donald Trump was at it again.
Only this time, he made sure to say the words that would ease concern that all hope was lost when it came to striking a trade deal.
In fact, Trump said, a deal could happen “sooner than you think.”
Trump warns that ‘markets would crash’ if Congress impeaches him Yaron Steinbuch – NY Post bit.ly/2nu78dw Regulation
Keynote Address of Director of Enforcement James M.McDonald at the Practising Law Institute’s White Collar Crime 2019 Program CFTCThe mission of the CFTC’s Division of Enforcement is to protect the public and preserve market integrity by detecting, investigating, and prosecuting violations of the Commodity Exchange Act (the Act or CEA) and Commission Regulations.This mission fits within the Agency’s broader goal of fostering open, transparent, competitive, and financially sound commodities and derivatives markets.
CFTC Charges Illinois-Based Trader with Violating Soybean Futures Speculative Position Limits CFTCThe U.S.Commodity Futures Trading Commission today issued an order filing and settling charges against ARMKAT LLC, located in Winnetka, Illinois, for violating spot-month speculative position limits in soybean oil and soybean meal futures.
Remarks by DSIO Director Joshua B.Sterling Before the District of Columbia Bar Association CFTCNew Day Rising: Focusing the Division of Swap Dealer and Intermediary Oversight to Embrace Today’s Challenges and Tomorrow’s Opportunities
CFTC’s latest personal-liability warning: CCO charged with false statements Todd Ehret – ReutersThe risk of being held personally liable is a serious concern of top executives at financial services firms, especially chief compliance officers.
CFTC’s equivalence plan divides clearing houses and clients US end-users prefer alternative compliance, but foreign CCPs want exempt status Noah Zuss – Risk.netEveryone likes having a choice – it is the essence of a free market.So Christopher Giancarlo may well have thought he was doing the clearing industry a favour when he proposed a reform in July that would give foreign clearing houses a choice of ways to serve US end-users.
German fraud trial hears trader’s journey from floor to jet-set John O’Donnell – ReutersA British banker told Germany’s biggest fraud trial this week how he worked his way from office clerk to jet-setting trader before his dream career came to an early end.
Information for customers of Thomas Cook Plc – being alert to scams UK FCAAll customers of Thomas Cook should remain alert to the possibility of fraud.
Criminals will use Thomas Cook going into liquidation as a cover story to scam you out of your money.
Updates to the FCA’s directions under the Temporary Transitional Power UK FCAToday, the Financial Conduct Authority (FCA) has updated and published draft directions under its Temporary Transitional Power (TTP).
The TTP gives the FCA flexibility in applying post-Brexit requirements, allowing firms to transition to a new UK regulatory framework.The directions would only come into effect on exit day if the UK leaves the EU without an implementation period..